Free shipping gains steam among top online retailers

Order Management

Free shipping is important to customers – there is no denying that. One study from Forrester found that nearly half of customers (44 percent) abandon their shopping carts before completing the transaction because the shipping ended up costing too much. An additional 22 percent left products in their online shopping carts because the shipping fees weren’t made readily transparent. A separate report from E-tailing Ground suggested that 73 percent of customers view unconditional free shipping as being "critical" to the overall online shopping experience.

Catering to the customer's whim

So how are retailers responding to customers increased demand for better shipping practices? Some merchants, such as Amazon, actually increased free shipping minimums, which means customers have to spend more to save money.

A study from Forrester found that 44 percent of customers abandon their shopping carts before completing the transaction because the shipping costs too too much.

Although Amazon generally tends to be a trend setter among online retailers, it seems that may not be the case when it comes to free shipping. In fact, one recent report from Internet Retailer actually found that more online retailers are actually offering unconditional free shipping, meaning there aren’t any minimums that people have to reach to get free shipping.

According to the study, 294 of the top 1,000 online retailers have made moves to offer their customers unconditional free shipping, thereby minimizing one of the leading barriers to online shopping. Although 294 is not much more than one-third of the total, that number represents a significant jump in comparison with years past. When Internet Retailer took the survey just five years ago in 2008, only two of the top 100 online retailers offered free shipping on all orders. Now, 43 of the top 100 Web merchants provide their customers with free shipping, regardless of how much or how little they spend.

Even if retailers don’t offer free shipping, many are moving in that direction. For example, Walmart lowered the threshold from $50 to $35 this year. According to a spokesperson from the company, the shift was critical for improving the online shopping experience – approximately 99 percent of the items sold on Walmart’s website are eligible for free shipping with the reduced threshold.

"For those 331 web retailers that require a minimum purchase for free shipping there is a wide range, although only 42 require a purchase of more than $100,” the report added. “Most require a purchase of between $50 and $100. The lowest threshold is $9.99 at music retailer Sam Ash Music Corp., No. 285 in the Top 500, and the highest is $1,900 at Aus-Tex Appliances, No. 991 in the Second 500 Guide, which ranks web retailers Nos. 501 to 1000."

Companies should look to streamline shipping when possible. By using the right eCommerce software, businesses can more effectively coordinate shipping costs and order fulfillment processes across channels, which may go a long way in terms of both reducing costs and improving efficiency.

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